Adcock Ingram full-year profit slips 3%

Most people postponed non-essential medicine purchases and hospital visits during the pandemic, while lockdown restrictions helped people avoid the flu season.
Most people postponed non-essential medicine purchases and hospital visits during the pandemic, while lockdown restrictions helped people avoid the flu season.
Image: 123RF/Alexander Raths

Adcock Ingram posted a 3% dip in annual earnings on Wednesday as pandemic-related restrictions helped people avoid flu in the winter months of June and July, hurting sales of related drugs.

Headline earnings per share - the main measure of corporate profit in SA - came in at 404.7 cents for the year ended June 30, compared with 417.5 cents in the previous year.

Adcock, whose over-the-counter (OTC) drug sales division contributes the most to the company's profit, said revenue rose 6% to 7.78 billion rand ($517.6 million). The company declared a gross dividend of 90 cents per share.

Most people postponed non-essential medicine purchases and hospital visits during the pandemic, while lockdown restrictions helped people avoid the flu season.

"The economic outlook for our market remains uncertain and we face the reality of living with Covid-19 restrictions until vaccines have been widely administered," the company said in a statement.

Adcock sells hospital products and OTC and prescription drugs in South Africa, where it also markets fast-moving consumer goods. It operates in other parts of Africa and India as well.

The firm will be looking for acquisitions in all its divisions except OTC over the next 18 to 24 months, its Chief Executive Andrew Hall told Reuters in an interview.

Its OTC division, which accounts for over a third of its total profit, saw earnings drop by 31%, and Hall said acquisition opportunities in this division were rare.

Its shares were slightly up in early trade against the broader all-share index, which was marginally down at 0845 GMT.

Adcock makes the diluting substance used in Pfizer Covid-19 vaccines to convert them from powdered to liquid form before being administered.

It hopes to sell 6 million units of the ingredient this year, which could add up to 30 billion rand of revenues, Hall said.

Reuters

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